How our app went from $20,000/day to $2/day in revenue

A real look beyond the glamor of the App Store

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This is a follow up to the post where we announced that we’re shutting down Next Keyboard. My goal is to share some of the hard lessons we’ve learned along the way and show a side of the App Store that’s often not talked about.

It started out a few years ago. The App Store was experiencing the 21st century version of a gold rush. Developers became prospectors, looking for their stake in the attention economy. The media perpetuated this exciting myth, by following developers who quit their jobs and “hit it big” on the App Store.

There’s a saying that people usually attribute to writer Mark Twain (questionably), “History doesn’t repeat itself, but it does rhyme.” Prospecting for gold became extremely expensive, and more fortunes were made by merchants than by the actual prospectors.

I know the feeling, because I quit my own job to build an independent digital product studio, Tiny Hearts. We’ve had some great successes, creating products both for ourselves and for our clients, but the story of Next Keyboard isn’t one of them. Instead, it’s one that’s more indicative of the harsh nature of the App Store. Here’s the reality of things — and it’s been like this for years: It’s really tough out here on the App Store. I’ve been doing this since 2010, and it hasn’t gotten any easier. If you’re doing it just for the money, there’s much easier ways to go about achieving that goal.

“Here’s the reality of things: it’s really tough out here on the App Store.”

When we first launched Next Keyboard, we were generating $20,000 in sales per day. That quickly went down to $2 per day.

The App Store is always a risky place and revenue drops are to be expected but this particular drop off was much steeper than we expected. It’s important to bet wisely and consciously, and to know your odds going into everything. As with many risky endeavors, diversifying is a good principle to follow. (In my studio’s case, we generate services revenue in addition to our own in-house product work.)

The journey made me reflect a lot. In hindsight, I didn’t realize how risky building a keyboard would be. I certainly did not know how complicated it was. Naivete is good sometimes, because you don’t get stuck in the trap of overthinking, but this time it bit us in the butt. Yet I still believe every entrepreneur has to have some degree of naivete to even think they can achieve their unbelievably ambitious goals. This naivete has taken its toll on even the best — for example, before the Twitch TV founders built Twitch TV, they built a calendar app called Kiko. Then a month later, Google Calendar came along.

But fundamentally, we also bit off more than we could chew. Keyboards might sound simple, but they’re very complicated products. Under the hood, building a keyboard requires the combination of natural language processing (NLP), machine learning, and data science. We’re a relatively small independent product studio, and even the reasonable amount of cash we raised on Kickstarter only covered half the salary of one data scientist.

You’re always betting, place them wisely

When we built Next Keyboard, we were amongst the first to experiment with Apple’s custom keyboard functionality. Unfortunately all third-party iOS keyboards — including Next Keyboard — were never truly stable because of Apple’s API. There’s a surprisingly poor user experience around using third-party keyboards (such as setting up a new keyboard). Even Google’s Keyboard, Gboard, has issues today, a full two years after third-party keyboards were announced.

“Despite the creativity shown by developers, third-party keyboards haven’t received much love from Apple since their debut in iOS 8.” Federico Viticci from his iOS 10 review

We bet on mobile. We bet on Apple, and that will not change. We’re still very confident in iOS and we’re going to continue to focus there. We took a risk on keyboards, and that didn’t work out for us.

These bets sound funny and lighthearted, but we learned firsthand that betting has serious real-world implications. We let ourselves down and we let our users down. We weren’t able to make the best keyboard in the world (which was our mission, and what we aim to do when we make products. For example, Wake could be considered the best alarm on iPhone). We were able to make one of the best third party keyboards, but not THE best. And Google, Apple, and Microsoft beat us in the end.

We didn’t do what we set out to do, so in those ways we failed, but in a lot of other ways we succeeded. We were able to make something pretty amazing (it got up to #2, most funded Kickstarter app, we built a community around this product and vision, it made us experts in the messaging space, made us a stronger team, and it’s raised our visibility in the community). And we’re still very excited about messaging and iOS 10. We’ve cut our teeth with keyboards and bots, and we plan on pushing the envelope with messaging.

Next Emoji Keyboard

As OGs on the App Store, we’ve been thinking beyond apps for the past few years. We have explored extensions, keyboards and — most recently — bots and iMessage apps! (In fact, we’ll be launching our first bot named GeniusBot soon!) We started a successful Bot meetup. We’ve also made some other fun keyboards for ourselves — Kimunji and KappaKey — and for clients. In fact, Next Emoji Keyboard will survive and continue the Next Keyboard legacy. The sticker packs will survive as well — they’re available as iMessage packs.

And most importantly, although we won’t be supporting Next Keyboard, we’ve seen the most important elements of it — cursor control and emoji predictions — alive and well in both Apple’s and Google’s keyboards, amongst other apps.

So many people talk about pivoting, but for us, we believe that sometimes it’s important for people simply to quit — and move on.

So many people talk about pivoting, but for us, we believe that sometimes it’s important for people simply to quit — and move on. Even if you play to win, nobody can win every bet. And sometimes, pivoting isn’t enough.

If you don’t play, you’ll never win

Despite what it might sound like, if we could do it again, we totally would. It’s easy to say that if I was wiser, I would have done even more due diligence before executing on the project. We learned a lot as a company, but Next Keyboard was a very expensive lesson. With revenue, grants, and services work that came in, we weren’t in an unreasonably deep hole. In a way, you could say we hedged our bets.

We’re in a nicer position because we don’t have a plan that’s contingent on VC funding. If we did, we would’ve been another dead startup. And we learned this lesson the hard way, so our collaborators can benefit from these insights.

Even though it was an expensive lesson, things worked out. There are things we wished would’ve turned out differently. We let our users down, and we don’t feel good about that. But we came out stronger and smarter for it, we’ve learned an unbelievable amount, and we will still bet on iOS, messaging and conversational interfaces. If you don’t play, you’ll never win. It’s been tough for us to swallow, but we paid for one of the most important lessons: making money with an app is risky.

Want to make money? Don’t just build an app. Build a business.

My team and I are writing an eBook on what we’ve learned building a business and developing digital products for the App Store and for companies like Philips, Wealthsimple, and Plantronics. Sign up if you want to be the first to read our eBook, for updates from our team, and our thoughts on product development.